Poverty proposals lack levers for lasting change
The mayors of New Zealand’s three most impoverished districts have asked the Prime Minister to establish “demarcation zones” giving them greater independence and special funding to eradicate entrenched inter-generational poverty.
“Demarcation zones” have been proposed for the Far North, Gisborne and Rotorua by the McGuinness Institute, a New Zealand public policy think-tank.
The idea came from the special economic zones (SEZs) trialled in isolated parts of India and China. Selected local leaders and government officials were given greater powers and funds to boost economic development. Without safeguards, however, SEZs became less democratic and more corrupt, triggering resistance and violence.
The McGuinness Institute’s latest report recommended “demarcation zones” as a new pathway for “social investment” to improve spending, rather than increasing taxes or debt to better meet the needs of a fast-ageing population.
New Zealand’s regional and local authorities were reportedly paralysed by incoherent structures, departmental and institutional silos, and risk-averse administrators squabbling over scare resources.
The institute conducted workshops in Queenstown, Manawatu, Rotorua, Gisborne, Kaitaia and Kaikohe to explore how to break the cycle of intergenerational poverty, which is poverty induced by the socially and economically challenged background of a person’s parents.
Individuals and groups become trapped in poverty because their culture is incompatible with social and economic success. The challenge is how to help people change their beliefs, values and behaviours preventing success.
Far North Mayor John Carter wants welfare to switch from being “as of right” to “a reward” system, for example, by employing the unemployed on community projects. He proposed that professional cultural leaders be contracted to help families adopt more successful views, standards and actions.
Gisborne Mayor Meng Foon wants to boost jobs by establishing a special economic zone with low tax rates.
It would encourage private sector entrepreneurialism to grow the real economy, and offer families sustainable employment opportunities. But it would also attract competitive workers from outside the zone and not offer professional assistance with cultural transformation.
Rotorua Mayor Steve Chadwick wants social services funding to be devolved to a local leadership group she already leads, comprising local heads of government agencies and the district health board.
In addition, her hand-picked “great leaders” would better target social services to the families most in need, but without requiring and enabling cultural transformation.
In effect, Chadwickism would create a socialist bureaucracy of favourites using command economics to support but not transform the most alienated families. Foonism is much the same as Reaganomics; it would enrich business with some undirected “trickle down” reaching the target families.
Only Carterism would work bottom-up to transform the cultural capacity of target families to achieve social and economic success. In essence, Chadwick and Foon have proposed boondoggles; wasteful projects that can’t deliver the cultural change necessary to halt the intergenerational transmission of poverty.
An email survey of the 400-odd members of the Rotorua District Residents and Ratepayers identified other reasons why citizens reject greater autonomy and the “great leaders” proposed by Mayor Chadwick.
The most common reason cited is declining trust in Rotorua’s mayor. Since 2013 she has politicised the council’s officials and policy processes, and polarised the community with the Te Arawa Partnership Plan.
Many suspect a political stunt timed for the national election. While nobody wants to be seen to be against “eradicating entrenched inter-generational poverty” in principle, many see the promise as cynically intended to embarrass the National Government which has struggled with poverty.
While rationalisation can fix structural confusion in governance and administration, new zonal autocracies and boondoggles can’t deliver intergenerational cultural transformation.